ARLINGTON—Less than a week after reporting $6.2 billion in third quarter losses and machinist union members rejecting its latest contract offer, Boeing announced on October 28, stock offerings to raise up to $22 billion to help ease its financial woes.
“Boeing intends to use the net proceeds from the Offerings for general corporate purposes, which may include, among other things, repayment of debt, additions to working capital, capital expenditures, and funding and investments in the Company’s subsidiaries,” the company wrote in a statement.
On October 23, Boeing reported total Consolidated Debt at $57.7 billion, relatively unchanged from the previous quarter and its credit rating is near junk with S&P reporting BBB-, Moody’s at Baa3 and Fitch at BBB-. On a positive note, the aerospace juggernaut is reporting a total backlog of $511 billion, up $42 billion from the third quarter of 2023.
To commence President and CEO Kelly Ortberg’s goal to “stabilize the business” from his four-point plan, Boeing is offering 90 million shares of common stock and $5 billion of depository shares. Boeing expects to grant to the underwriters of the Offerings a 30-day option to purchase up to an additional (i) 13,500,000 shares of Common Stock and (ii) $750 million of Depositary Shares, solely to cover over-allotments, if any.
Holders of the Depositary Shares will be entitled to a proportional fractional interest in the rights and preferences of the Preferred Stock, including conversion, dividend, liquidation and voting rights, subject to the provisions of a deposit agreement. The Preferred Stock is expected to have a liquidation preference of $1,000 per share. Unless earlier converted, each share of Preferred Stock will automatically convert, for settlement on or about October 15, 2027, into a variable number of shares of Common Stock based on the applicable conversion rate, and each Depositary Share will automatically convert into several shares of Common Stock equal to a proportionate fractional interest in such shares of Common Stock.
The dividend rate, conversion terms and other terms of the Preferred Stock will be determined at the time of pricing of the offering of the Depositary Shares. Currently, there is no public market for the Depositary Shares or the Preferred Stock. Boeing intends to apply to list the Depositary Shares on the New York Stock Exchange under the symbol “BA.PRA.”
Goldman Sachs & Co. LLC, BofA Securities, Citigroup and J.P. Morgan are acting as lead joint bookrunning managers for the Offerings. Wells Fargo Securities, BNP PARIBAS, Deutsche Bank Securities, Mizuho, Morgan Stanley, RBC Capital Markets and SMBC Nikko are also acting as joint bookrunning managers for the Offerings. PJT Partners is acting as Boeing’s financial advisor for the Offerings.
A registration statement on Form S-3 relating to these securities has been filed with the Securities and Exchange Commission (the “SEC”) and has become effective. Each Offering may be made only by means of a prospectus supplement and accompanying prospectus.
Copies of the preliminary prospectus supplements and accompanying prospectuses related to the Offerings can be obtained by visiting the SEC’s website at http://www.sec.gov or by contacting Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, by telephone at 1-866-471-2526 or by email at prospectus-ny@ny.email.gs.com; BofA Securities, NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, Attention: Prospectus Department, or by email at dg.prospectus_requests@bofa.com; Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by telephone at 1-800-831-9146; or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com.
